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Consumer forum gives policy holder a leg up on insurance claim

Thursday, March 14, 2019

By Bhavna Uchil

Insurance company rejects claim stating fracture took place on same leg 35 years ago; Consumer Forum orders to pay up

A suburban city consumer forum has ordered an insurance company to pay the claim amount along with compensation and litigation costs to a policy holder whose claim the company had rejected on the basis that a fracture he had suffered in 2010 had arisen due to another he had suffered on the same leg in 1975.

The insurance company had stated while rejecting the claim amount of Rs. 2 lakhs that as per the terms and conditions in its policy document it does not give coverage for any disease that arises due to a past injury.

The complainant had purchased a medical insurance policy from the company in 2008 and renewed it for two consecutive years. In 2010, he had suffered a fracture near his knee due to falling while walking on the road. As per the opinion of a bone specialist, he had undergone a surgery. When he had applied to the insurance company for reimbursement, his claim had been rejected, after which he had approached the Consumer Forum in 2011. The complainant stated to the Forum that he had informed the company about the past surgery of the year 1975, after which it had still given him a policy.

The company stated before the Forum that the complainant had hidden the matter of his past surgery, which violates the terms and conditions of the policy. That, as per their policy, a policy holder will not get reimbursement for any costs arising out of a a past illness for four years after the purchase of the policy. Further that, in the discharge summary of the policy holder, there is mention of many surgeries performed earlier on the same leg in 1975 and that the present illness was related to the past one.

In the judgment by the Forum last month, it noted that the insurance company had rejected the claim by connecting a surgery which had taken place on the same leg around 25 years ago. The company, it noted, had taken help of the medical history of the policy holder noted in his discharge summary to state that he had a past illness, and thus justified rejecting his claim.

The Forum stated that it seems that the company has connected the surgeries for fracture that had taken place – the old one near the ankle to the new injury – near the knee. And that both these fractures had taken place due to accidents. Further, it stated that fractures are not illnesses and hence one illness arose due to another is a context that cannot be used. The Forum said that in its opinion, the two surgeries do not have a connection and thereby, the reason given by the company to reject his claim is not connected. It found the company deficient in service and engaging in unfair trade practice under the Consumer Protection Act.

It was also the complaint of the policy holder that the company had not returned to him the original documents regarding medical expenses incurred by him, that he had submitted to the company to claim reimbursement. The Forum found that such behaviour of the insurance company had caused mental and physical agony to the complainant, as he could not use them to avail benefits under some other schemes.

While the complainant had demanded a compensation of Rs. 6 lakhs and litigation costs, the Forum ordered that Rs. 2 lakhs as had been incurred for medical expenses be reimbursed. As compensation, the Forum ordered the company to pay Rs. 25,000 and Rs. 10,000 towards litigation.

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